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Bharti Airtel Q3 net profit falls 22% at Rs 1,011 crore on high interest costs

Bharti said the roll-out of its 3G network resulted in a higher amortisation cost of Rs 164 cr for Q3, while its net interest cost rose to Rs 116 cr.

Feb 08, 2012, 03.28 PM IST
Bharti Airtel Q3 net profit falls 22% on high interest cost
NEW DELHI: The country's largest and the world's fifth-biggest mobile phone carrier by subscribers, Bharti Airtel on Wednesday reported a 22% decline in consolidated net profit to Rs 1,011 crore for the October- December quarter due to higher interest outgo and costs related to the roll-out of 3G network.

This is the eighth straight quarter for which Bharti Airtel has reported a decline in net profit.

The company had posted a consolidated net profit of Rs 1,303 crore in the third quarter ended December 31, 2010, Bharti Airtel said in a statement.

At 11.19, shares of Bharti Airtel fell by 5.33 per cent to Rs 359 on the BSE.

Bharti Airtel said the roll-out of its 3G network resulted in a higher amortisation cost of Rs 164 crore for the quarter, while its net interest cost rose to Rs 116 crore during the reporting period, the company said.

The company's total reveunes rose to Rs 18,477 crore in the October-December quarter from Rs 15,772 crore in the year-ago period, registering a growth of 17 per cent.

"I am pleased that investments in branding and networks continue to be our focus in India, as we enhance customer experience for voice quality and cater to the ever increasing demand for data. These investments are resulting in healthy growth of Mobile revenues.," Bharti Airtel Chairman and Managing Director Sunil Bharti Mittal said.

The company's overall customer base stood at 243 million across 19 countries.

Monthly average revenue per user (ARPU), a key metric for telecom carriers, from Bharti's Indian operations rose to 187 during the reporting quarter from 183 in the September quarter.

As of December 31, 2011, Bharti Airtel has a net debt of $12.72 billion.

Bharti Airtel is seeing some benefits of last year's increase in call prices in India, Sanjay Kapoor, chief executive officer for India and South Asia, said.

The revneue from African operations rose by 16.1 per cent year-on year to $1.05 billion during the quarter, it said.

Bharti ventured into Africa in 2010 by acquiring most of the African operations of Kuwait's Zain in a $9 billion debt-funded deal. But high costs there mean margins are weaker compared with India and Bharti has yet to turn a profit in the continent, although the operations are improving.

Bharti's revenue in Africa is growing faster than its operation expenses, Manoj Kohli, chief executive officer for international operations, said, adding that the company was past peak capital expenditure in its operations in the region.

The sector's profitability has been squeezed after the entry of the new operators triggered a vicious call-price war. Market leader Bharti and some of its rivals raised call prices in the middle of last year, which was the first such increase in at least two years.

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